Integration platforms take on DOM

Integrated platforms for supply chain execution apps are folding in distributed order management (DOM) solutions and processes, which often need data from systems for inventory management or store labor to arrive at optimal fulfillment options for customers and retailers.

For several years, major suppliers of supply chain execution (SCE) software, including warehouse management system (WMS) solutions, have been putting more focus on integration. As they have expanded their offerings to include transportation management system (TMS), labor management system (LMS) and other types of solutions such as slotting, these suppliers have been touting the value of an integrated foundation for multiple applications.

These platforms matter because they promise to not only reduce information technology (IT) costs and do away with custom data integration efforts, but they essentially become “platforms” for integrated processes that need to happen as part of warehouse operations and order fulfillment.

An integrated set of SCE applications results in a smoother handoff of business processes between SCE applications domains. Plans made in TMS are feasible at the warehouse level because TMS “knows” more about the constraints at the warehouse; or events in one solution, like a yard management system (YMS), can instantly be reflected in an integrated WMS.

In short, there is business value to integrated execution applications. At Ashley Furniture Industries, an Arcadia, Wisc.-based manufacturer and retailer of furniture, its use of integrated SCE software from HighJump Software facilitates this type of smooth information flow from one application function to the next, says Daniel Woychik, director of supply chain execution for Ashley Furniture.

For example, Woychik explains, a yard check-in event in the YMS creates available inventory in the WMS, and prioritized yard moves are created off inventory deficiencies identified in the DC under WMS. “Our receiving departments are always unloading the highest priority trailers and pre-positioning the next most important,” says Woychik.

So while integration seems like a wonkish subject, when it comes to SCE software, a vendor’s ability to offer effective integration can result in faster, better business processes. Techie-sounding considerations like common data models carry real value because each SCE application understands the other when it comes to details like orders, inventory units or locations. “Our HighJump solutions are fully integrated, rather than interfaced, and they share a common data model,” Woychik says. “We are able to dynamically prioritize and optimize because we have real-time data.”

Suppliers who have built integration platforms point out that a true platform isn’t just about passing data from one system to another, but facilitating smooth business processes that cross application domains. Eric Lamphier, senior director of product management with Manhattan Associates, says Manhattan began devising its “Supply Chain Process Platform” nearly 10 years ago because it saw the value in a common data model to easily facilitate business processes that may need information from more than one application.

Manhattan’s platform has been in place in a “productized” way since early 2010, says Lamphier, and more than 100 customers are live with solutions that take advantage of it. The main advantage is that solutions “talk a common language,” he adds, which helps Manhattan enhance solutions and helps users deploy cross-application business processes. “Having a platform is infinitely better for us, from an internal development and innovation perspective, but more importantly, it gives our customers better value, more quickly.”

These benefits of having an integrated SCE platform have been around for several years, but that’s not to say SCE platforms aren’t evolving. They are changing to encompass additional applications, including distributed order management (DOM), as well as store-level solutions for the retail industry. The purpose of “platform” is not just for linking WMS to TMS or other traditional execution systems, but to DOM or to other systems for supply chain management.

Integrated DOM The rapid rise of omni-channel fulfillment means that SCE platforms increasingly have to be able to connect to DOM in an advanced way, says Dwight Klappich, a research vice president with analyst firm Gartner. DOM solutions are getting more sophisticated, he adds. Whereas earlier generation DOM was mainly about capturing data from multiple channels and then distributing the fulfillment process to a feasible back-end system and fulfillment node, today’s DOM solutions have more sophisticated logic. They have rules engines that consider factors such as whether the fulfillment node has enough labor to process an order or whether margins for certain goods in a store would make it more profitable to fulfill from a DC, even if the store is closer to the customer.

“The nature of DOM has evolved, and, as it has evolved, it has increased the importance of being able to tightly integrate it to other functions because DOM’s role becomes more about orchestration, and in some cases, optimization versus just capturing and distributing orders,” says Klappich.

Lamphier concurs that omni-channel strategy has become a top priority for retailers, and as part of that, they are interested in DOM solutions that are integrated with WMS and TMS so that available-to-promise (ATP) functionality in DOM is cognizant of exactly what inventory is in the distribution network, and they can see the feasibility of delivery promises. “The common data model that we use is vital,” he says. “With WMS and TMS and order management all on the same platform, order management can send order updates and WMS can send inventory availability updates to the centralized available-to-promise engine that sits in order management.”

Manhattan Associates developed its own DOM software and is generally not an acquisitive vendor, says Lamphier. However, when Manhattan acquired Global Bay Technologies and its store sales and inventory management solution set in 2014, the company spent about nine months moving the Global Bay software onto the platform. Now, Manhattan has close to 30 applications on the platform, he adds, which makes it easier to develop new, integrated functions. “Innovating and creating new capabilities for other locales in the supply chain is just a lot more straightforward when you have that sort of recipe book our platform provides,” he says.

The integration strategy at JDA is based on an enterprise service bus (ESB) architecture, both for its SCE applications such as WMS and TMS, but also for its demand and supply chain planning solutions, as well as integrated DOM functionality with its partnership with IBM, says Fabrizio Brasca, JDA’s vice president of solution strategy for intelligent fulfillment. “It’s very open infrastructure to be able to connect into our workflows,” says Brasca.

The integration achieved with the ESB approach goes beyond passing data between systems, says Brasca, it creates workflows. For example, under JDA’s partnership with IBM around DOM and IBM’s Sterling Commerce DOM system, the vendors have used JDA’s ESB architecture to build workflows that tap both DOM and SCE and/or planning processes.

The first set of integrated workflows, released in 2015, included transaction and fulfillment of parcel orders; returns receiving and processing; click and collect; and destination-driven demand. Click and collect addresses the need to consolidate multiple orders and get them to a customer’s preferred delivery or pickup location, while destination-driven demand traces the actual source of a customer order (for instance, ordered while in a store, but shipped to the consumer’s home from a DC), and relays that history back to JDA’s demand planning functionality.

Under the returns processing workflow, says Brasca, part of the functionality is to assess the condition of goods that come back to a warehouse to be able quickly “triage” them so that goods in saleable condition are routed for resale and are recognized by DOM as saleable inventory. “It is a whole workflow around the creation, receiving and triaging of returns,” Brasca says. “That’s a very critical goal for omni-channel retailers. The quicker you can get inventory back a saleable state, the better.”

According to John Savari, group vice president for JDA’s shared technology group, the ESB approach JDA uses for integration also “exposes” business logic in the underlying software through an adapter layer, which provides for richer integration than just passing messages. “We can actually run all the business logic in the target system,” he says. “So we are doing all the validation, all of the error handling, should an exception occur within a workflow. That means when you look at the business processes themselves, they can be very rich. They can be 15 steps or more with a lot of branching, depending on the conditions or exceptions being met or exceeded.”

The next round of DOM enhancements from JDA and IBM, slated for April 2016, says Brasca, will include tying DOM to JDA’s store labor functionality. DOM needs effective ties into systems that manage issues like inventory availability, labor skills and availability, and transportation costs, to make the most “intelligent” decision on how to distribute and fill an order, says Brasca, so linking DOM processes with store labor is a natural step.

Enterprise resource planning (ERP) vendors with full-fledged WMS can also offer an integrated platform for order management and WMS. However, the order management modules in most ERP solutions were not designed to handle true multi-channel DOM challenges. That said, some ERP vendors offer sophisticated order management and Web commerce modules, along with SCE applications.

Different approaches Infor, which offers both ERP and WMS software, has an integration framework called ION, which can be used to integrate ERP with WMS, or with other systems. ION also can be used to integrate Infor’s ERP or WMS solutions with the global commerce platform offered by GT Nexus, a vendor Infor acquired last September.

The GT Nexus solution is a cloud-based platform that allows companies to collaborate with partners around global trade and logistics processes. According to John Atherton, a senior vice president with GT Nexus, the GT Nexus platform is open to many types of systems and vendor solutions, not just Infor systems, but by creating standard touchpoints between the GT Nexus platform and ION, ION can serve as a single “conduit” between the GT Nexus commerce platform and Infor solutions.

At Softeon, which offers integrated DOM and SCE applications, the product platform is built on a service-oriented architecture augmented by a distributed component framework, says Dinesh Dongre, vice president of strategy for Softeon. The benefits of the product platform include making it easier for users to “optimize holistically, rather than in specific silos,” but also to extend into technology cost of ownership concerns, he adds.

For example, having TMS and WMS under an integrated product platform simplifies upgrades, says Dongre. “With disparate solutions, a company might have to re-integrate the WMS with the TMS at the time of a WMS upgrade, and then do the same when the TMS is upgraded,” he says. “With the right integrated platform, you should be able to upgrade all components at once with no integration issues.”

Since approaches to integration vary, users need to closely examine the vendor’s framework to see if it will bring them the integrated business processes they seek, while also ensuring the functionality within each application is a good fit. As JDA’s Brasca points out, while integration frameworks are important, so is the richness of each solution area such as TMS or WMS. If the user company has complex needs around dock planning as part of transportation management, the solution should support that. “Just because a vendor has integration doesn’t mean they are driving business value,” Brasca says. “You need deep domain capabilities within each application.”

Historically, many end-user companies have taken a best-of-breed approach to systems and have made it work. They may have ERP from one vendor, WMS from another, and TMS from someone else. However, this requires in-house or consultant integration expertise and has tended to become a more complex challenge as the number of systems and cross-application process flows needed for business has accelerated.

As Klappich notes, a company could integrate a DOM solution to a WMS or multiple WMS on its own, but it’s not a challenge to be taken lightly. “What we are seeing with advanced DOM is that more and more business logic is being added,” he says. “Now, as you add that more sophisticated logic into the DOM layer, having the ability to get information from other systems so you can carry out that logic becomes more important, and to be frank, it can lead to some pretty complicated integration. For companies that have multiple systems and are trying to do all that integration on their own—it’s not an inconsequential technical exercise.”

Suppliers of warehouse management systems (WMS) and other types of supply chain execution solutions increasingly take a platform approach in which their distinct functional applications share common data models or other integration mechanisms. This can help a user company break down application silos within an enterprise, but to coordinate activities across a complex supply chain, higher-level cloud-based collaboration solutions are sometimes used.

At Cisco Systems, a leading provider of networking equipment and what can be thought of as plumbing for the Internet, uses a cloud-based collaboration solution to coordinate its supply chain, which includes contract manufacturers, component suppliers to the contract manufacturing partners, and a network of about 25 inventory “hubs” that support manufacturing and fulfillment. The end goal is to have highly accurate order promising by gaining visibility all the way from components moving from suppliers to hub site, all the way through to in-transit updates on finished goods headed to customers, says Chalam Kalahasti, Cisco’s director of global materials and inventory management.

“We use a cloud-based application for global visibility into supply/demand issues,” says Kalahasti. “Our primary focus was to improve Cisco’s delivery performance and drive better customer outcomes. It also helps us understand how well the inventory is performing, and help with decisions around whether we need to purchase more inventory or whether it is at the right level.”

The solution, which also offers workflow and alerting capabilities, integrates data from contract manufacturers’ enterprise resource planning (ERP) and manufacturing execution systems (MES) to get visibility of supply, demand and inventory at various locations and stages including work in process inventory. It also ties into inventory data from the WMS solutions used by third-party logistics (3PLs) firms that manage the hubs on behalf of Cisco. According to Kalahasti, the cloud solution provides visibility into planning and supply response data, inventory, build commitments, as well as materials order status from the partners.

Under Cisco’s Global Hub Network model, hub warehouses are located in close proximity to contract manufacturing plants so one hub can service multiple sites. This streamlines the flow of raw materials into plants and allows plants to eliminate large storage areas for components and raw materials, explains Kalahasti. “We want the manufacturing partners to be focused on optimizing their space around manufacturing versus warehousing,” he says.

To work well, the solution needs to get updates from contract manufacturers’ ERP systems, as well as WMS or transportation management systems used by 3PL partners so that any delays or issues that might impact customer orders are immediately known and mitigated. The cloud solution also provides alerts when ocean shipments experience any delays that might impact the service level agreement (SLA) for delivery. “The visibility into our supply inflow is near real time,” says Kalahasti. “So if a contract manufacturer pulls some inventory, we would get an update almost immediately.”

On the outbound side, the collaboration solution for the hub network not only keeps track of finished goods inventory on hand at hubs, but also product level details. This includes details about the assembly level and configuration of materials within finished goods. Cisco’s customer order promising application would then use this near time global supply view, including what is being held at each node, to “match” against what the customer wants and provide the optimal commitment to customer needs, Kalahasti says.

While individual partners are expected to have effective ERP, MES or WMS solutions to run their own processes in a coordinated way, the platform provides inter-enterprise visibility, alerting and collaboration, Kalahasti explains. “For us to orchestrate and improve the experience for the customer, first, we need to enhance predictability within our supply chain,” he says. “And secondarily, once a customer promise is made, if anything happens that might impact a promise date, we need a means to be alerted early and react to any possible delays.”

About the Author

Roberto Michel Editor at Large

Roberto Michel, an editor at large for Modern, has covered manufacturing and supply chain management trends since 1986, mainly as a former staff editor and former contributor at Manufacturing Business Technology. He has been a contributor to Modern since 2004. He has worked on numerous show dailies, including at ProMat, the North American Material Handling Logistics show, and National Manufacturing Week. He can be reached at robertomichel@centurylink.net.

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